A commentary by NS: Today’s China is more isolated than 20 years ago

Transitioning to a phone-based domestic payment system has left visiting foreigners behind

View from China with an Austrian School of Economics Perspective

Thanks to three years of isolation and extreme policies during the Covid years, plus highly restrictive visa policies and high travel costs, the resident foreign population of China is dwindling. With so few non-Chinese traveling to China, the relentless anti-China narrative which fills Western social media feeds off of this isolation and further magnifies it. Preposterous stories are told and believed. One reason for this is of course because so few people have traveled to China recently to refute them.

At the same time, practically speaking, the fewer foreigners there are, the easier it is to forget and/or fail to accommodate them. This is particularly glaring when it comes to paying for stuff.

Truly, incredibly the China I have just come back to is a China more isolated and closed off to foreigners than when I first came in 2004.

Back in the 1950s and 1960s for example when China was similar to today's North Korea, foreigners (the few living in Beijing then mostly diplomats) were not allowed to take the city's subway. I guess subways also doubled up as bomb shelters for people and military so letting foreigners in there was seen as a national security threat.

These days it's not easy for foreign tourists to take the subways in China. Buying a subway ticket with cash.... you'll have to ask around. It's usually possible, but not easy.

When I first arrived in 2004, China was already very much open. You could walk into any bank and exchange currency, AND OPEN A BANK ACCOUNT. I think I have opened about 5 bank accounts in Beijing and 5 in Shanghai over the years. It was so easy to open a bank account; you could do it in ten minutes with a tourist visa.

From what I hear, back in the 1990s you didn’t even need an ID! You could give them any name you wanted and get an ATM card.

Times have changed. Today you have to have a valid residence permit to open a bank account. All my 10 bank accounts are frozen, unusable, because I don't have a valid residence permit. But who needs a bank account today when everything in China is done online with apps, right? Well, how do you transfer money into your online wallet in WeChat and Alipay? You need a bank account to deposit cash to and then "pull" it into your online wallet. Or you beg friends to "exchange" a few hundred CNY cash for Alipay credit.

Incredibly, Alipay and WeChat recently made big announcements that they are going to allow foreign credit cards on their system. The announcement was made and shared as if China had just landed a man on the Moon. And I am thinking, this would be news if it were North Korea. Is this really news in the second largest world economy? Surely it’s an embarrassment to even announce it. They should have just quietly done it and when people noticed said "oh, we've always had it".

Not to mention that it doesn't even work. You can add a foreign credit card all you want, but you cannot use it. It's grayed out and it says "this payment method is not valid for this merchant". It's not valid for any merchant.

Not to mention I added a Hong Kong, CHINA credit card.

Taobao, China’s top e-commerce platform, has a similar issue. It does have a place to add foreign credit cards, which you can – at least in theory – use if you’re willing to pay an extra 3%. Unfortunately, the charge often fails due to some software bug, especially when using iPhones. The workaround is to try the payment again using an Android phone.

I asked at a local bank branch if I can open a bank account, and they told me oh not here, there is ONE special branch that does all the work with foreigners. THIS WAS NOT THE CASE IN 2004. You could walk into any branch and open a bank account. The branch they designate for foreigners is conveniently nowhere near a subway stop.

"But it's just a 15 minute drive."

Can you imagine what it would take for a foreigner to own and register a car in China if it is that complicated opening a bank account? Oh, you chronic complainer, just take a taxi FCS. And how do you take a taxi? You can only now do it with an app and pay with WeChat/Alipay. No more flagging a taxi down and giving him cash.

[Note: This is not true everywhere in China.]

I have been pleasantly surprised that despite the "cashless" reputation, everybody still takes cash. However, you may on occasion run into a different problem: no change.

Recently I wanted to pay for a pizza in cash. She didn't have change.

Don't you have WeChat or Alipay?

I bit my tongue. So I had to walk a few minutes to find a convenience store and buy a 2 yuan bottle of water with a 100 yuan bill (~US$15) in order to get some.

I've heard from other foreigners many hotels no longer accept foreigners (a remnant of COVID rules). THIS WAS TRUE IN 2004 BUT WAS ON ITS WAY OUT. By 2006 you'd really have to hit some boonies in Guizhou for a hotel to tell you foreigners cannot stay there.

I had none of these issues when I first landed in China in 2004 on a student visa. Now I have a wife, child, I own an apartment and speak the language and I am struggling to function.

I am not comparing China to the West, I am comparing China to China. 2004 and 2023. China was more open to foreigners in 2004.

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